ADX Indicator

Nobody uses the ADX? , I use it and I like enough.

It's amazing more folks are not using the ADX indicator. I've always been a big fan.

I believe the Wizard himself uses this in his magic trading den.

jcv and ktrade

Why not post how you use it ?


Lou

If you like it, can you explain us why?
I do not see anything in ADX that would let me love that...
I'm a trend trader, but i never saw how it could help me...

Can it tell me if the trend is good, i dont see how! i use trendline
DI+- cross! Hum, i use td breack with volume...
Well, if you show me how you use it i may change my point of view...


Ps.: i know how it work, i just dont see the advantage...

There are some good articles on ADX here: http://traderclub.com/cgi-bin/discus/show.cgi?107/107In my opinion, the guy who wrote these articles is one of the greats.

tell me why u like it....
PLS...
post it also...

OK, my small description:<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o></o>

In vertical line 1, we can see as the negative ADX (bearish force) has crossed to the rise the bullish ADX, which means that the bearish forces are becoming present, even crosses to the rise main line ADX, this would have to mark in the graph of prices a zone to us of support where to consider to open short positions. Later we see as the main ADX and the bear (red line) begin to go together towards line 30, and see also as the price has begun to move to the loss.<o></o>

In vertical line 2, both ADX have exceeded with force the level of ADX 30, which confirms the force to us of the bearish movement. <o></o>

In vertical line 3, both lines return to cross this time the level of ADX level 40, the tendency already is unstoppable. <o></o>

In vertical line 4 we see the exhaustion of the tendency, the bearish ADX begins to approach the bullish ADX, and the main ADX begins to back down, is hour to close positions. <o></o>

In vertical line 5, history is repeated, but this time the force of the tendency is smaller, since it has not managed to jump over ADX level 30, and we see as all the lines of ADX fall generating lateral motion by lack of tendencies. <o></o>

Is possible to be increasing the amount of lots, according to they are crossed levels of ADX, 20, 30 and 40, the strategies that each one can mount depend on the form to work of each trader.<o></o>

I request excuses by my English…

I have used ADX in the past as a tool for establishing an end of trend. When used with an additional price momentum indicator, such as CCI it can help as verificatioin of oversold or overbought. This is especially true if the line is over 30, which it should be in a good trending market. If you use change of slope on the ADX and combine it with CCI oversold level, then you should get a good indication for the end of a trend.

If you are trend trading then the ADX should help you verify how strong the trend is as well.

Cheers

I use the ADX quite a bit....great video on the CBOT website on it's use

Here is an example of how you can use it for an exit on a strong trending market. Or an opportunity as a possible trade signal.

<TABLE id=texttable><TBODY><TR vAlign=top><TD id=gap></TD><TD id=result_cell>Observe as the D+ and the D- (red & yelow) come near to each other as soon as the tendency is finished...


</TD></TR></TBODY></TABLE>

Yeah, the video:



http://www.cbot.com/cbot/pub/cont_de...+41863,00.html

Of course, and like any other indicator, we do not have to use it when a Fundamental Announcement is next, reason why must control the FA calendar.

hi jcv2001....

in what time frame do you use your system?
thanks in advance

I'm a big fan too, and it was the first indicator I read about

the CBOT video link posted by jcv2001 is great - thanks for that reference

I don't know if you guys using other indicators or not. but I do find out is

if ADX has big gap in between if MACD have big gap too. that will be the big trend.

if you using W%R more likely will show when start trend. if it does not stay at top or bottom. then trend may be ended.

Aroon this indicator (most broker does not have this one) if you understand this one just go with 15 min chart. then win every time.

below is my system

http://mtuppers.googlepages.com/test.html

as far as I know, is when the gap between D+ and D- are if it's small one. then more likely will be ended soon. if its big one, then check with other indicator. Aroon, and W%R more likely will show when it's ended

the Aroon indicator setting was by default form marketiva
it was set as period 20

sorry 4XWeezal
as I am unable to send you PM

hi jcv

Can you please share us your template /indicators?
Lets see the possibilities and who knows make an EA.

Best Regards,
Marcelo Marques

Hey everyone,

I, too, love the ADX indicator. I have used many indicators in the past (MACD, stochs, RSI, CCI), but ADX has quickly become my one and only indicator.

I bought Welles Wilder's book "New Concepts in Technichal Trading Systems" and, even though it's quite obvious the book was written DECADES ago (back when people calculated their indicators by hand and plotted their charts on graph paper), he formulated a wonderfully simple trading plan off the Directional Movement lines (+DI * -DI) that still works to this day.

Here's the secret that Wilder lays out in his book that most people don't know about: The Extreme Point Rule.

Most people try to trade ADX by entering long whenever +DI crosses -DI or go short when -DI crosses +DI. This, inevitably, leads to whipsaws and people throw in the towel and think that ADX just doesn't work as a standalone system. Instead they just ADX as a confirming indicator.

But Wilder knew about the shortcomings of just trading DI crosses. That's where his Extreme Point Rule comes in, and that is what makes ADX a system all by itself.

Here's how it works:

On any given candle where the directional movement is great enough to cause the DI lines to cross, you wait until the bar closes. Then, when the bar closes, you DO NOT automatically enter a trade in the direction of the DI cross. You take the high of the completed bar (if +DI crosses above -DI), or you take the low of the completed bar (if -DI crosses above +DI) and place either a buy stop or sell stop past the extreme point. Wilder points out in his book that the candle that causes the DI cross is, usually, very significant. Often times, if +DI crosses up, the extreme high of that candle will not be passed. Then price falls and -DI crosses up and price continues to move lower.

If someone was trading all DI crosses blindly, there would be a whipsaw when going long and then price falling and forcing them to close out at a loss. The Extreme Point Rule would keep them out of the trade, however.

Let's take a look at how this works in practice:

On the attached chart, look at vertical line one. At that point, -DI crossed over +DI. The low of that candle is used at the Extreme Point. (Actually, I personally add some extra pips. For example, on the GBP/JPY, I will usually subtract 10 pips from the exteme low, or add 20 pips to the high). The Extreme Point was passed on the next candle, taking us into a short.

At vertical line 2, +DI crossed over -DI. Again, the high of that candle is taken and 20 pips added to it (10 pips + spread). That's where our stop loss for our short position would be, as well as a buy stop to take us long. As you can see, however, the extreme point was never triggered, and we stayed short.

At vertical line 3, -DI crossed over +DI and a new extreme point is defined. If you aren't already short, you can take that extreme point, subtract 10 pips, and put in a sell stop. If you are already short, you can possible take this as an opportunity to add to your position. The extreme point was triggered on the next candle, continuing the down trend.

At vertical line 4, +DI crossed -DI again. We then take the extreme point, add 20 pips, move our stop loss and put in a new buy stop order. As you can see, the exteme point was never triggered.

At vertical line 5, -DI crossed +DI, we had a new extreme point defined, the buy stop would be cancelled and a new sell stop would be placed 10 pips below the extreme point. This extreme point was triggered shortly after, and the downtrend continues.

This system is not foolproof. Even with the Extreme Point Rule, there are some whipsaws and some losses. What this system does do, however, is keep you in for the really LONG trends that will more than make up for the whipsaws. For example, the first short would have been put in at 209.52. Price is currently at 205.26. That's 426 pips so far.

love a bit of adx myself check this indy out im sure ye will like it!